# Medicaid Balance Billing Rules for NEMT: What You Cannot Charge a Rider

Canonical URL: https://nemtguide.com/glossary/medicaid-balance-billing/ · Updated 2026-10-02

Medicaid balance billing is charging a Medicaid rider for any part of a covered ride beyond what Medicaid, a health plan, or a broker paid. Federal rules ban it: Medicaid's payment, plus any copay your state sets, is payment in full (42 CFR 447.15), so a claim denied for your error is your loss. Bill a rider only in narrow cases, such as an uncovered ride they chose to pay.

- Medicaid's payment, plus any copay your state allows, is payment in full for a covered ride. The rider owes nothing more.
- A claim denied for your own error, such as a late or incomplete claim or a missing authorization, cannot be passed to the rider.
- Health plan members owe nothing even when the plan never pays you (42 CFR 438.106), and the same rule binds a broker the state pays as a prepaid plan.
- You may bill a rider for a ride Medicaid does not cover only if the rider knew before the ride and chose to pay, and you can prove it.
- Knowingly charging more than the state's rate is a federal felony, with fines up to $100,000 and up to 10 years in prison.

Balance billing means sending the rider a bill for what the payer did not pay. On a covered Medicaid ride you cannot do it, whether Medicaid paid part of the claim, all of it, or nothing. The rules come from federal law, your state's provider manual, and your broker agreement, and each one points the same way: your fight over money is with the payer, never with the rider.

## What the balance billing rules say

Four rules set the limit:

- **Payment in full.** A state may only use providers who accept its payment, plus any deductible, coinsurance, or copay the state plan requires, as payment in full ([42 CFR 447.15](https://www.ecfr.gov/current/title-42/section-447.15)). Indiana's provider manual (version 7.1, September 8, 2026) applies this to fee-for-service and managed care alike and bars charging a member or the member's family "any amount not paid for covered services."
- **Managed care members are not liable.** A health plan's members owe nothing for covered services when the state or the plan does not pay the provider under its contract, referral, or other arrangement, and nothing beyond what they would owe if the plan provided the service itself ([42 CFR 438.106](https://www.ecfr.gov/current/title-42/section-438.106); Social Security Act section 1932(b)(6)). A ride broker that the state pays as a NEMT prepaid plan must follow the same rule (42 CFR 438.9(b)(6)).
- **Your provider agreement.** Indiana's rendering provider agreement has you promise not to bill members or their families for any added charge on covered services, other than a copay the law allows. Breaking it is grounds to end your agreement. See [Medicaid provider agreement](https://nemtguide.com/glossary/medicaid-provider-agreement/).
- **Federal criminal law.** Knowingly and willfully charging for a Medicaid service at a rate above the state's rate, or above the managed care contract rate, is a felony: a fine up to $100,000, up to 10 years in prison, or both (42 U.S.C. 1320a-7b(d)).

Broker agreements can go further. MTM Health's standard agreement, in the January 1, 2023 version Pennsylvania posts, says you look only to MTM for payment and may never bill a member, even if MTM or its client does not pay, unless MTM or its client authorizes a copay or other fee (section 6.C). It also says claims filed more than 90 days after the ride, or past another limit MTM's client sets, are not eligible for payment, so a late claim is your loss, not the rider's. The [private pay NEMT](https://nemtguide.com/guides/private-pay-nemt/) guide covers when a broker rider may pay you directly.

## What you may collect from a Medicaid rider

Only the cost sharing your state sets. CMS allows cost sharing for NEMT only when the state covers rides as an optional medical service under its state plan, never when it pays for rides as an administrative activity. Any amount must be nominal and follow the federal limits (SMD 23-006, September 28, 2023). Your state must publish its cost sharing schedule and give it to every participating provider ([42 CFR 447.57](https://www.ecfr.gov/current/title-42/section-447.57)).

Indiana, for one, suspended all its copays on April 1, 2020. Its transportation module (August 19, 2025) says that when the pause ended on July 1, 2024, only Package C, its CHIP plan, brought copays back, and Healthy Indiana Plan cost sharing stayed paused. Package C's $10 transport copay covers only emergency transportation and physician-requested ambulance transfers between facilities (Member Eligibility and Benefit Coverage module, September 1, 2026). A scheduled change could add some later: starting October 1, 2028, federal law requires states to charge cost sharing of up to $35 on services the state picks for expansion adults with income above the poverty line (CMS bulletin, November 18, 2025). Whether a ride is one of those services will be your state's choice.

When another insurer pays first, you may collect only the smaller of the allowed copay or the gap up to the Medicaid amount. That rule is explained in [Medicaid third party liability](https://nemtguide.com/glossary/third-party-liability/).

## When billing a rider is not balance billing

A bill to the rider is allowed in a few cases, each with conditions you must be able to prove:

- **The rider was not eligible on the date of the ride.** Indiana lets you bill when the member was told of the ineligibility and agreed in writing to pay (Member Eligibility and Benefit Coverage module, version 8.5, September 1, 2026). If eligibility is later made retroactive to the ride date, you bill Medicaid and refund the rider. CMS says states must pay for rides taken during a retroactive period, and you may first need to return what the rider paid (SMD 23-006).
- **The ride is not a covered service and the rider chose it.** Indiana allows it only when the service is determined to be noncovered, such as one over a benefit limit or one whose prior authorization was denied, and the member understood before the service that Medicaid would not pay. You must keep a record that the member chose it freely. Texas lets you bill a private pay patient only if you told the client at the time of service, and you need written, signed proof (Texas Medicaid Provider Procedures Manual, section 1.7.12.1, October 2026).
- **The rider never told you about Medicaid.** Indiana lets you bill a member who did not tell you of the coverage when you tried to find a payer. If you learn of it within the 180-day fee-for-service filing limit, you must bill Medicaid and repay the member in full at once.

Watch the wording of any notice. Indiana rejects waiver forms with conditional language, such as a line saying the member pays if Medicaid turns out not to cover the service, and rejects generic consent forms unless they name the specific service and are signed before it. A signed waiver also does not stop the state from checking the facts behind it.

Retroactive coverage is getting shorter. Today a state must reach back up to three months before the application month (42 CFR 435.915). For applications made on or after January 1, 2027, that drops to one month for expansion adults and two months for everyone else (CMS bulletin, November 18, 2025), as covered in [Medicaid retroactive coverage in 2027](https://nemtguide.com/news/medicaid-retroactive-coverage-cut/).

## In practice: a denied claim stays with you

Your driver takes a rider to dialysis, and the claim comes back denied because the trip record is missing the rider's signature. The ride was covered and the rider was eligible, so this is a paperwork error on your side, not a ride the rider chose to pay for. You may not bill the rider.

Texas spells this out. Its provider manual (October 2026, section 1.7.12) bars billing an eligible client for a denied or reduced claim caused by errors such as an incomplete or incorrect claim, a claim filed after the deadline, a corrected claim not resubmitted in time, a missed appeal deadline, or a service done without required prior authorization. Indiana limits your recourse to an adjustment request, administrative review, and appeal.

Instead of billing the rider:

1. **Correct and resubmit what you can document.** Fix errors such as a wrong code, date, or rider ID within the payer's corrected claim window. Never sign for a rider or change a trip log after the fact. The [timely filing limit](https://nemtguide.com/glossary/timely-filing-limit/) entry explains the clocks.
2. **Appeal if the denial is wrong.** Use the [claim appeal letter](https://nemtguide.com/templates/claim-appeal-letter/), and see [NEMT claim denials](https://nemtguide.com/guides/nemt-claim-denials/) for the common causes.
3. **Write it off if both fail, then fix the cause.** Have drivers collect signatures at drop-off on the [trip log](https://nemtguide.com/templates/nemt-trip-log-template/), and confirm the authorization before the van leaves.

No-shows work the same way almost everywhere. CMS says states and providers may not charge a Medicaid member for one (SMD 23-006). North Dakota's NEMT manual (January 2026) is a rare exception, and only for a provider that bills every rider the same way. See [billing for no-shows](https://nemtguide.com/guides/billing-for-no-shows/).

## How to stay on the right side

1. **Check eligibility before every ride and again before you bill.** See [eligibility verification](https://nemtguide.com/glossary/eligibility-verification/).
2. **Decide at booking whether the ride is covered.** If it is, the rider pays nothing beyond any copay your state sets.
3. **Put any private charge in writing before the ride.** Name the trip, the date, and the price, and have the rider sign. Leave out "if Medicaid does not pay" wording.
4. **Keep the notice with the trip record,** so you can show the rider chose the ride knowing Medicaid would not pay.
5. **Refund fast** when the rider turns out to have coverage for that date, then bill Medicaid or the broker.

## Frequently asked questions

### Can I bill a Medicaid rider if the broker denies my claim?

Not for a covered ride denied because of your own error. Under 42 CFR 447.15 you accept Medicaid's payment as payment in full, and health plan members are protected even when you are not paid (42 CFR 438.106). Texas Medicaid's provider manual (October 2026) lists late claims, incomplete or incorrect claims, missed appeal deadlines, and missing prior authorization among errors you may not bill a client for. Fix and resubmit the claim, or appeal it.

### Can I charge a Medicaid rider for a no-show?

Almost never. CMS says states and providers may not charge a Medicaid member for a no-show (SMD 23-006, September 28, 2023). Indiana's provider manual says a missed appointment is part of the cost of doing business that the Medicaid rate already covers, and Texas Medicaid says its clients cannot be charged for failing to keep an appointment. North Dakota's NEMT manual (January 2026) is a rare exception for a provider that bills every rider the same way. See billing for no-shows for the details.

### Can a Medicaid member choose to pay me privately for a ride?

For a ride Medicaid does not cover, yes, if the rider knew before the ride that Medicaid would not pay and chose to pay anyway, and you keep proof. Indiana requires a record showing the member chose the service knowing it was not covered. Texas lets you bill a private pay patient only with written, signed notice. Broker agreements such as MTM's bar billing members for rides you give under them, so read yours first.

### What if I learn after the ride that the rider had Medicaid?

Bill Medicaid and refund the rider. Indiana lets you bill a member who never told you about Medicaid, but if you learn of the coverage within its 180-day filing limit, you must bill Medicaid and repay the member in full at once. If a rider becomes eligible back to the date of the ride, Indiana and Texas both require a refund and a Medicaid claim.

### Can I charge a Medicaid rider a copay?

Only if your state charges one for rides. CMS says cost sharing is allowed for NEMT only when the state covers rides as an optional medical service, never when it pays for them as an administrative activity, and the amount must be nominal (SMD 23-006). Indiana suspended copays on April 1, 2020, and only its CHIP plan, Package C, has brought them back. Check your state's published cost sharing schedule before you collect anything.

## Official resources

- [eCFR: 42 CFR 447.15, Acceptance of State payment as payment in full](https://www.ecfr.gov/current/title-42/section-447.15)
- [CMS: Medicaid Transportation Coverage Guide (SMD 23-006)](https://www.medicaid.gov/federal-policy-guidance/downloads/smd23006.pdf)
- [Indiana Medicaid: Provider Enrollment module (restrictions on billing members)](https://www.in.gov/medicaid/providers/files/modules/provider-enrollment.pdf)
- [Texas Medicaid Provider Procedures Manual, Section 1 (billing clients)](https://www.tmhp.com/sites/default/files/file-library/resources/provider-manuals/tmppm/pdf-chapters/2026/2026-10-october/1_01_provider_enrollment.pdf)